Integrated tax benefit for own residences

  1. Introduction

The Sixth State Reform has given broader tax autonomy to the Regions. As a result, the Regions are now responsible for a significant part of their own income. The Regions have received a number of exclusive powers in relation to specific tax reductions, including expenditure for own residences, expenditure for energy-saving measures, expenditure for service vouchers, etc.

This tax autonomy is explained further in the file 'Tax autonomy in personal income tax after the Sixth State Reform'.

The manner in which the Flemish Region exercises its exclusive powers to grant a tax reduction for expenditure relating to the taxpayer’s own residence[1] is explained below.

  1. Tax reduction for own residence:the Flemish “woonbonus” and the Flemish integrated “woonbonus”

a) Loans taken out from 1/1/2015 up to and including 31/12/2015: the Flemish “woonbonus”[2]

The Flemish “woonbonus” can be used for expenses that a taxpayer incurs to acquire or retain his sole and own residence (interest and capital of mortgage loan, premiums for mortgage protection insurance). He may fill a ”basket” with these expenses up to a defined maximum amount. The tax reduction itself is then calculated by applying a certain rate to that basket.

On account of the adjustment, the above basket was curtailed for mortgage loans taken out after 1January 2015. The rate was also set at 40%, as opposed to the marginal rate (the highest tax rate that is paid on income) that applied previously.

Finally the decree also determined that indexation of the basic and additional amounts was frozen for all tax reductions relating to own residences.

The Flemish “woonbonus” as it applies to mortgage loans taken out before and after 1January 2015 is compared below:

Loans taken out before 1/1/2015 / Loans taken out from 1/1/2015 up to and including 31/12/2015
Basic amount / EUR 2,280 / EUR 1,520
Increase for first 10 years
if it remains the sole residence / + EUR 760 / + EUR 760
Additional increase as from three dependent children, when taking out the loan / + EUR 80 / + EUR 80
How much is my effective tax reduction?
In other words, what percentage is applied to expenses that are eligible for the tax reduction? / Versus the 'Marginal rate'. This is the highest tax rate that you pay on your income. It lies between 30% and 50%. / 40%

More information on the conditions for applying the Flemish “woonbonus” can be found on the following website: (in Dutch).

b) Loans taken out from 1/1/2016: the integrated “woonbonus”

The integrated “woonbonus”, which applies to mortgage loans taken out as from 1January 2016, integrates the Flemish “woonbonus” and all tax reductions that could still be applied to new mortgage loans taken out for the own, but not sole residences (including the tax reduction for long-term savings[3] and for normal interest[4]).

The integrated “woonbonus” still applies to expenses incurred for mortgage loans that are taken out to acquire or retain own residences and the premiums for the accompanying mortgage protection insurance. If the conditions are met and the residence is the taxpayer’s own residence when the expenses are incurred, these can be taken into account within a “basic basket”.

If the residence is also the taxpayer’s sole residence when the mortgage loan is taken out, the “basic basket” is increased by EUR 760. And, if the taxpayer has at least three dependent children on 1January of the year following the one in which the mortgage loan is taken out, the “basic basket” is increased even further by EUR 80.The amount of the basket is not indexed.

The main difference therefore lies in the fact that the residence no longer has to be the sole residence when the mortgage loan is taken out in order to enjoy the integrated “woonbonus”. The only requirement is that the residence must be the own residence when the expenses are incurred.

More information on the conditions for applying the integrated “woonbonus” can be found on the following website: (in Dutch).

  1. Federal competences for secondary property (anon exclusive power)

By means of a transitional rule, the Federal Administration grants the old tax benefits for the ”woonbonus” for expenses that a taxpayer incurs to acquire or retain his sole but not his own residence (interest and capital of mortgage loan, premiums for mortgage protection insurance) This federal “woonbonus” is quite similar to the Flemish “woonbonus”, but the amount of the basket and the applicable rate differs. The federal “woonbonus” has no budgetary implications for the Flemish region.

Apart from the federal “woonbonus”, there is also a federal tax reduction for long-term savings (capital) and a federal tax deduction for normal interest (these interests are deductible from the immovable income).

  1. General overview of the tax reductions for own residences (Flemish) and secondary property (Federal)

Own and sole residence (Flemish competence) / Not soleresidence
Own residence (Flemish competence) / Secondary property
(Federal competence)
Situation 1/1/2005 - 31/12/2014 / Max. EUR2,280 + EUR760 (first 10years if sole residence) + EUR80 (for at least 3dependent children), at the highest applicable tax rate / Max. EUR2,280, at 30% + reduction for interest depending on the amount of taxable immovable income (own residence is exempt) / Max. EUR2,260, at 30%
+ reduction for interest
Situation 1/1/2015 - 31/12/2015 / Max. EUR1,520 + EUR760 (first 10years if sole residence) + EUR80 (for at least 3dependent children), at 40%
Situation after 1/1/2016 / Max. EUR1,520 + EUR760 (first 10years if sole residence) + EUR80 (for at least 3dependent children), at 40% / Max. EUR1,520 + EUR760 (first 10years) + EUR80 (for at least 3dependent children), at 40%

[1]The “own residence” is the residence in which the tax payer resides and of which he is the owner (“eigenaar”), possessor (“bezitter”), leasehold tenant (“erfpachter”), holder of building rights (“opstalhouder”) or usufructuary (“vruchtgebruiker”).

[2] Article 14537 and article 14538 of the Belgian Income Tax Code 1992.

[3]Tax reduction for expenses that a tax payer incurs for capital of a mortgage loan, engaged to build, acquire, or renovate a home, and for additional premiums of a mortgage insurance. This reduction is applied to the sum of EUR 171 and 6% of the net aggregate taxable income, with a maximum of EUR 2,280, at a rate of 30%.

[4]Tax reduction for expenses that a tax payer incurs for interest of a mortgage loan, engaged to acquire or retain a home. Interest can only reduce taxes at a rate of 40% when there is taxable immovable income (the own residence is exempted as immovable income).